Sentencia 1350/2024, del Tribunal Supremo, Pleno de la Sala de lo Social, de 19 de diciembre

The aforementioned judgement was handed down in an appeal for the unification of doctrine and resolves the question of whether, if the dismissal is judicially declared unfair, the judicial body can recognise an additional and different compensation to that established in article 56 of the ET, in accordance with the provisions of ILO Convention 158.

The question, as we have said, is relevant, given that in recent years there have been an increasing number of court rulings, based on ILO Convention 158 and Article 24 of the European Social Charter (‘ESCS’), admitted the possibility of recognising an indemnity in addition to the legally established compensation when this was meagre and did not have a dissuasive effect for the company, nor sufficiently compensated the worker for the loss of employment, when, in the opinion of these judgements, there was clear and evident illegality, fraud of law or abuse of rights in the company’s decision to terminate the contract. In short, these court decisions held that the concept of ‘adequate compensation’ contained in Article 10 of ILO Convention 158 may include other concepts of compensation when the employer’s conduct causes damage to the employee that goes beyond mere loss of earnings. In short, they consider that in exceptional circumstances, compensation for unfair termination of the contract may be set at a higher amount than the legal amount to compensate for all damages (consequential damages, loss of earnings, non-pecuniary damage, etc.), which must be specified in the petition and be the subject of proof.

In fact, the High Court itself recognises in its judgement now analysed that ‘The question raised in the appeal has had a very different response from the judicial bodies and even from the scientific doctrine, which has positioned itself in favour and against the fact that compensation for unfair dismissal can go beyond that established by the Spanish legislator. It is also well known that this issue is having an impact that goes beyond this legal environment. The relevance of the debate is evident and it is now up to this Court to resolve this discrepancy between the judicial bodies, but within the legal framework that is applicable to the case’.

That said, Article 10 of the ILO Convention provides that ‘If the bodies referred to in Article 8 of this Convention conclude that the termination of the employment relationship is unjustified and if under national law and practice they are not empowered or do not consider it possible in the circumstances to annul the termination and possibly order or propose the reinstatement of the worker, they shall have the power to order the payment of adequate compensation or such other relief as may be considered appropriate’.

The Supreme Court’s conclusion is clear and declares unequivocally that it follows from the aforementioned Article 10 that it is the domestic legislation of the signatory States of the ILO’s international Convention that can determine the appropriate compensation, and may do so on the basis of different and varied factors, and even making specific provisions for situations that compromise special rights. And this, says the High Court, is what the national legislator has done in article 56.1 of the ET.

Consequently, says the judgement analysed, ‘It is not legally possible, therefore, on the basis of an unfair dismissal, to bring up the variety of damages caused, in order to claim an increase in the compensation that the Law establishes in order to calculate another, unrelated compensation, as these damages, in all their variety, are considered by art. 56 when it establishes the rules for their quantification’.

Based on the fact that the termination measure adopted by the employer can be challenged before the judicial bodies of the social order, in the face of an unjustified termination of the employment relationship, our regulation in this area has been given by the legislator by establishing that the judicial body that declares the dismissal to be unjustified should give the option between reinstatement or a fixed amount of compensation. And these effects, in relation to article 10 of the ILO Convention, do not contravene this mandate because it has not, in any case, been left to the judicial decision to determine this compensation and Spain has already established, by means of legislation, that the compensation is to be obtained according to parameters which, due to the imprecision of that provision, cannot be said to be inadequate. In short, it is not possible to conclude that the judicial body can agree compensation other than that fixed, which is determined on a case-by-case basis.

The judgment thus concludes: ‘This being so, it is not possible for the courts to go beyond this framework of legal application, establishing reparations by categories of unjustified dismissal or exceptionalities, depending on the case. The Spanish judicial body, in the case of unjustified dismissal, whether individual or collective, is not empowered to grant at its discretion the option of reinstatement in terms other than those provided for by law and in view of the personal circumstances of the dismissed worker, nor to set an amount of compensation different from that provided for by domestic legislation […]. …] it is not possible for the court to establish in a judgment compensation for unfair dismissal, when this is the option taken by the employer or, as the case may be, by the person holding that right, in an amount which is not that which results from the provisions of art. 56.1 of the Workers‘ Statute’.

A final reflection – and criticism – must be made of the judgement in question, which concerns the clarification or nuance made in fine in relation to Article 24 of the European Social Charter: ‘the above conclusion cannot be altered by the invocation in the appeal of the revised ESC, as it is not appropriate to apply it in this case. As stated above, this instrument was ratified by Spain after the time when the dismissal took place and, as already indicated by this Chamber in STS 270/2022, of 29 March (rcud. 2142/2020), this means that ‘this treaty was not part of the domestic legal system and this would violate the legal certainty guaranteed by art. 9.3 of the EC. The dismissal must be classified in accordance with the legal rules applicable on the date of the termination of the contract’.

This consideration could suggest that dismissals carried out after 29 April 2021, when the European Social Charter was ratified by Spain, would be subject to a higher compensation than that provided for in Article 56.1 of the ET when, in the opinion of the judge, the circumstances of the case make it advisable.

However, the aforementioned Article 24 of the revised European Social Charter does not depart from, but reproduces, the provisions of Article 10 of ILO Convention 158, which provides that ‘In order to ensure the effective exercise of the right of workers to protection in the event of dismissal, the Parties undertake to recognise: […] (b) the right of workers dismissed without valid reason to adequate compensation or other appropriate redress’. And Part II of the Annex to the revised European Social Charter provides, in relation to the above Article 24, that ‘It is understood that compensation or other appropriate redress in the event of dismissal without valid reason shall be determined by national laws or regulations, by collective agreements or by any other procedure appropriate to national circumstances’.

The concepts are the same, ergo the conclusion, in the opinion of the undersigned, must also be the same: both the term ‘appropriate’, for the purposes of compensation, and the term ‘appropriate’ in relation to reparation, other than reinstatement, has been developed in article 56.1 of the ET, a legal formula that does not conflict with either ILO Convention 158 or the European Social Charter.

The Supreme Court, therefore, far from having generated doubt in relation to Article 24 of the European Social Charter, should have left the question definitively resolved, conferring full legal certainty.